Introduction: institutional choice and constitutional principle
The line of case-law initiated by the Court of Justice of the European Union (CJEU) with the Berlioz ruling in 2017 has been hailed as a major development in European administrative law. Indeed, the importance of the CJEU’s findings regarding judicial review transcends the specific policy area in which the rulings originated – the area of administrative cooperation between national tax authorities. In particular, the Berlioz (C‑682/15), B (Joined Cases C‑245/19 and C‑246/19), and L (C‑437/19) line of case-law now stand for one of the most far-reaching steps that the CJEU has taken to ensure effective judicial protection: the step, in a nutshell, allows national courts to review – though only incidentally without cassation effects – administrative decisions that have been taken by authorities in a Member State distinct from their own.
There is far less case-law on horizontal – i.e., interstate – administrative decision-making than vertical administrative decision-making – often described as composite procedures. The implications of the fairly recent Berlioz judgment cannot yet be fully understood. I have very few certainties about the merits of that case-law – including, in fact, as to whether it is as beneficial to effective judicial protection as the CJEU would suggest.
My only certainty is that Berlioz, B and L do raise serious issues both from a perspective of institutional choice and as a matter of principle. I have pointed to some of those issues in a previous piece. In this blog post, my goal is simply to set out what my doubts are as to whether the issues in question are adequately addressed and, hopefully, to contribute to the efforts made by Professor Mariolina Eliantonio and Dr Marina Serrat to encourage further research in the field.
Transnational judicial review as a constitutional problem
My starting point is simple, and I have made it elsewhere. The European Union is not a nation-state – far less a unitary one. It is multijurisdictional in the sense that the powers of national and Union administration, as well as the powers of national and Union courts, are limited in scope. Such powers are delimited either by the principle of conferral – as in the case of the European Union’s institutions, in respect of its Member States – or by territorial boundaries – as in the case of the Member States, in respect of one another. This delimitation makes it possible for the Member States not to encroach upon the EU’s competences and vice-versa, as well as makes it possible to prevent the Member States from encroaching on each other’s sovereignty. Jurisdictional boundaries of this kind are a structural characteristic of the European Union’s constitutional architecture. As the constitutional law of a Union of States and citizens, European constitutional law must ensure the protection of both the Member States’ retained prerogatives and the rights of individuals – in particular, their fundamental rights.
In short, jurisdictional boundaries, including territorial boundaries, are not a mere technicality. While such boundaries may occasionally render the protection of individual rights suboptimal, they are not simply arbitrary obstacles to the protection of the individual. At a deeper level, they express fundamental constitutional values which are intrinsically worthy of respect. If ensuring the fundamental rights of individuals and respecting jurisdictional boundaries lead to conflicting solutions, a balance must be found between the two. Whether or not one is entirely comfortable with the need for such compromise and the potential risk of a lower level of judicial protection – and I must admit that I am not – such a need follows, in my view, from the institutional and constitutional design of the European Union. For as long as that design is not radically altered via Treaty change, such risks will remain.
The Berlioz, B, and L line of case-law illustrate how broader constitutional and theoretical challenges of this kind translate at the somewhat more prosaic level of administrative law (and of administrative cooperation between tax authorities). The solutions of the case law essentially allow Courts of one Member State to scrutinize the legality of administrative decisions taken by authorities of another Member State (e.g. a court in Member State A not only reviewing an information order issued by authorities of Member State A but also the information request sent to those authorities by the administration of Member State B, on which the order is based). Those solutions are problematic both for issues of institutional choice within the EU administrative and judicial system and on normative grounds, from a national as well as a European standpoint.
Three problems with the European case-law developed since Berlioz
First, let us consider institutional choice. Institutional choice concerns the choice of the institutions which should decide on a given matter. It concerns the question of ‘deciding who decides’. The choice of a given institution requires a comparative analysis of the advantages and disadvantages of institutional alternatives. From that point of view, it is unclear to me that entrusting a Member State’s Court with the power to review administrative decisions taken in a distinct member State – albeit only incidentally – presents more advantages than disadvantages when compared to the alternative solution of entrusting the entirety of the review of those decisions to the courts of the Member State where they were issued.
The reason is that, as the CJEU often states – including in the B and L rulings, “the essence of the right to an effective remedy enshrined in Article 47 of the Charter includes … the possibility, for the person who holds that right, of accessing a court or tribunal with the power …to consider all the issues of fact and of law that are relevant for resolving the case before it”. And yet, Courts are not well-equipped to consider all relevant issues of law that should underlay the review of a foreign decision – for instance, because they lack familiarity with the language, legal doctrines, case law and functioning of legal sources that have an impact on the legality of the decision in question. Or because, in the absence of a public law equivalent to the rules used to solve conflicts of laws in private law, the courts will simply lack the jurisdiction to apply foreign administrative law. In any event, the fact that Courts are in principle barred from applying foreign administrative law (as they will typically lack rules on conflicts of laws as in private law), and from considering all relevant issues of law to review administrative decisions taken in another Member State, should also lead us to question whether the CJEU’s case-law are even as beneficial to effective judicial protection as one may initially be inclined to assume.
Secondly, there are reasons to consider that subjecting administrative decisions to judicial review by the Courts of another Member State – again, even if only incidentally – are difficult to square with essential principles of national constitutional laws. One of those essential principles is the principle of separation of powers. Indeed, a state’s mechanisms of judicial review always express a certain conception of the relations between the judicial branch and executive-administrative branch – a conception which will not only result from the relevant state’s constitutional law, but also in how it chooses to give effect to the separation of powers on the legislative level. As Möllers suggests, the concrete definition of how a state’s distinct branches of government relate to one another and keep each other in check is a matter of national self-determination. Put differently, in more concrete terms: to establish that the administration must be subject to the scrutiny of courts is to establish that the executive-administrative branch is subject to the scrutiny of the judicial branch. Deciding that judicial review must exist and how and by whom it should be exercised is, therefore, a decision concerning how, within the framework of the relevant system of separation of powers, distinct branches of government relate to one another. Crucially, the relevant system of separation of powers that governs such a relation is not a theoretical, abstract system. It is the specific system that creates, legitimizes and balances the administrative or judicial powers in question – i.e., the system of the state to which those powers ultimately belong. Intruding into the relations between a state’s branches of government without the state’s consent is intruding into the self-determination of the state itself. Assuming that an EU Member State is based on the principle of popular sovereignty, then the legitimacy of all its branches of government derives from the consent of its people. Tellingly, several national constitutions (such as the Portuguese or the Italian) specifically state that justice is administered ‘in the name of the people’. Judicial review, in this light, and at the simplest level, is linked to how a people decides to structure the way in which distinct aspects of its political power are constrained and organized, and how a people decides to enable the State’s judicial branch to scrutinize the administrative branch in view of what the legislative branch has determined. Exercise of judicial power is still the exercise of a power that ultimately belongs to the people. When the judiciary exercises its power over the people, it is the people that exercise power over itself and according to the terms that it has itself decided. The Courts of state A may therefore exercise their power legitimately over people A; but, in the absence of its consent, not over people B.
One of the issues with allowing national Courts to review administrative decisions taken in another Member State is, then, that the people of the latter Member State have – presumably – never agreed to have its national administration reviewed by foreign courts which do not derive their authority from their own people’s consent. Such a review may, in fact, represent an inappropriate intrusion into the scheme of relations between branches of government that a Member State has set up to constrain the power of said branches.
Thirdly, it is apparent that the territorial boundaries between the Member States’ jurisdictions are recognized as valuable by the CJEU itself. Its case-law should therefore be as consistent as possible with the preservation of those divides. In Weltimmo (para 50), the CJEU stated that “it follows from the requirements derived from the territorial sovereignty of the Member State concerned, the principle of legality and the concept of the rule of law that the exercise of the power to impose penalties cannot take place, as a matter of principle, outside the legal limits within which an administrative authority is authorised to act subject to the law of its own Member State”. Put differently, the CJEU considers that the territorial limits of the Member States’ administrative branch serve more fundamental constitutional values. Why should this reasoning not also apply to the judicial branch?
Conclusion: is territoriality fading (unnecessarily)?
The CJEU’s recent rulings on judicial review in horizontal composite administrative procedures, in sum, raise multiple issues. It may be the case that such rulings represent an adequate compromise between the effective judicial protection of individuals and the territorial boundaries of the Member States – which are the spatial confines of their sovereignty. However, it appears to me that the jury is still out as to whether the Berlioz, B, and L rulings represent a more appropriate compromise than other alternatives. One could be the following.
Instead why not a review of the information request in the Member State of the requesting authority (the information order of the requested authority must, in principle, conform with it), while restricting the review of the information order (and of penalties in case of non-compliance) to the Courts of the requested authority’s own Member State? This does not appear to be an entirely unreasonable solution given that the L ruling itself suggests that the requested authority bears significant responsibility for the observance of procedural requirements (e.g., by demanding it to reason why a person is required to provide information).
Moreover, there is some precedent in the Borelli case-law that could back such an approach. In essence, Borelli holds that if, in an administrative procedure, a national authority adopts a binding preparatory act, and the Commission must adopt a final decision which conforms to that act, then only national Courts can review the preparatory act (which must be done like any other decision) and the CJEU can only, if anything, review the final Commission decision due to illegalities of its own. If one could adapt such a doctrine to horizontal composite procedures, the solution would be the following: A binding measure taken in one Member State (e.g. an information request) can only be reviewed by that Member State’s Courts, and the acts that must be adopted by a second Member State’s authorities to implement that measure (e.g. an information order) may only be reviewed by the second Member State’s Courts, and this to the extent that those authorities have, themselves, caused those acts to be illegal.
What is certain, at least, is that the principle of territoriality is no longer as strict as it once was. We may celebrate that the CJEU’s recent case-law may have (maybe?) initiated a new age for effective judicial protection, while still commemorating the substantive constitutional principles underlying territoriality that that case law may have sacrificed – possibly, unnecessarily so. If the principle of territoriality is fading in order to make way for better protection of individuals’ fundamental rights, then perhaps it fades for a noble reason. But if this is really the case, we should acknowledge the case law’s implications for the delicate balance of power upon which the European Union’s constitutional order rests.
Blog posted by Dr Filipe Brito Bastos (Assistant Professor, NOVA School of Law)
Filipe Brito Bastos is an assistant professor at NOVA School of Law in Lisbon, where he teaches constitutional law, administrative law, and European administrative law. He previously held a position as a post-doctoral researcher at the Amsterdam Centre for European Law and Governance, at the University of Amsterdam. He was awarded the degree of Doctor of Laws by the European University Institute in 2018, after defending a dissertation concerning the development of legal principles in the CJEU’s case-law that are specific to composite administrative decision-making. Filipe has published his research in journals such as CMLRev, EuConst, REALaw, EPL, and EJRR. His research interests include Portuguese and European public law broadly speaking (both administrative and constitutional law), particularly in the context of regulatory administrative law and multilevel administration.
Suggested citation: F Brito Bastos, “Berlioz, B AND L: Some doubts on how to balance effective judicial protection and territoriality”, REALaw.blog, available at https://realaw.blog/?p=1144.